The state Senate on Tuesday passed legislation, strongly supported by NJBIA, that would increase tax credits provided under the New Jersey Angel Investor law for qualified investments made in New Jersey emerging technology business ventures.
The bill, S-3189, does not change the annual $35 million annual cap set by law for the Angel Investor program, but it increases the value of tax credits from 20% to 35% of a taxpayer’s qualified investment in an emerging technology startup or venture fund.
The additional 5% bonus under current law means that investments made in emerging technology businesses located in low-income communities, or state certified as a minority or women owned enterprises, could be eligible for a tax credit of up to 40%.
The Senate voted 39-0 to pass the bill, which is sponsored by Senator Andrew Zwicker (D-16).
“NJBIA strongly supports this bill because it incentivizes investments in startups and stimulates innovation in fast-growing industries,” NJBIA Chief Government Affairs Officer Christopher Emigholz said. “Investments in emerging technology businesses lead to more than just patents; they spur economic activity and produce well-paying jobs.”
According to the New Jersey Economic Development Authority’s annual reports, NJEDA awarded $113.7 million in Angel Investor Tax Credits during the 10-year period from calendar year 2014 through calendar year 2023, incentivizing $996.4 million in qualified investments during that time.
Under the Angel Investor Tax Credit Program, the tax credit for eligible investments is taken against the taxpayer’s corporate business tax or individual gross income tax.
In addition to increasing the tax credit, S-3189 would lower from 224 to 149 the maximum number of employees that an emerging technology business may employ for a taxpayer to qualify for the tax credit.
